The Fuel Direct Scheme enables energy suppliers and benefit claimants to apply deductions for energy arrears from benefits. In light of the significant increase in energy bills, the Department for Work and Pensions (DWP) has written to UK energy suppliers about a temporary pause on requests to pay for ongoing energy usage from benefits.
The DWP will no longer facilitate requests from energy suppliers for new or increased ongoing consumption payments in an effort to ease the cost of living pressures for those on lower incomes.
However, StepChange says evidence suggests a wider suspension is needed to help households struggling with soaring gas and electricity prices.
It said its clients on universal credit are set to face an average monthly budget deficit of £77 by October even with Government support. The average deduction for advances and overpayments is about £50 a month.
The charity is calling on the DWP to pause deductions until benefits are uprated next April. Suspending deductions does not require legislation, and could be implemented quickly, it says.
Sherrelle Collman, Director of Caridon Foundation says she is in full support of this suggestion and hopes Government listens to StepChange.
“We are facing a national crisis, particularly when it comes to the cost of energy. Many of the people we support who are in receipt of Universal Credit are struggling to make ends meet. We are already aware of further price rises due in the Autumn and this is causing high levels of stress and anxity amongst our tenants.
As StepChange has already said, the Government has an opportunity to plug the support gap for over a million households by putting these deductions on hold until benefits are uprated. This pause would allow the Government to reform the system of deductions, so it is better aligned with the ability of claimants to cope with repayments.”